Discovering Paradise at The Secret Cove (The Search)

2008-03-16T21:25:00.103-05:00

This journey began a long time ago with me looking for the best bang for the buck to invest in a beach community in Central America. And in three years, I narrowed it down to Nicaragua's Pacific coast. Why did it take so long? Two words... Costa Rica. I fell in love with the place years ago, but I found it was already on the fast track for development, and the real-estate-deal train left well before I showed up at the station. Next, we looked in Goa, India (my wife's homeland and some of the best beaches in the World). We looked and looked (new development was stopped by a state government ban and the demand was high)

and finally found a nice place on a great beach, placed a bid on it, and in no time it was rejected. The asking price was too high for a property that was 21+ hours away! Other places we researched:

Panama - fast development with high demand;
Belize - great SCUBA diving sites, few beaches, hurricane area;
Mexico - funny laws for foreigners to own coastal properties and its... Mexico; and
Maine (my home state) - high demand, season too short, water too cold!

Why Nicaragua for Real Estate Investments?
After being disappointed with the high real estate prices in Costa Rica due to the high influx of American and European retirees, I started looking north at Nicaragua. A lot of people (including myself at first) would not even consider Nicaragua for investing in properties, due to their perceptions about Nicaragua - especially the Contra/Sandinista War, its economic status as the second poorest country in the western hemisphere, and President Daniel Ortega (former Sandinista leader) being.. well President Daniel Ortega.

Let me walk you through the facts that alleviated my concerns:

The Contra War ended 20 years ago, and over the past 15 years, Nicaragua has transformed itself into one of the safest countries in Latin America. The country has had free democratic elections since 1989 and has made significant progress towards strengthening its democratic institutions. Democracy and freedom are alive and well in Nicaragua.
Nicaragua is a poor country, but the people of Nicaragua are warm, helpful and genuine in many ways. Nicaragua maybe the second poorest country in the western hemisphere, but it is also the second safest country in Latin America after Uruguay (according to a recent UN report).
It has ratified Free Trade Agreements with major markets such as the United States, its Central American neighbors, the Dominican Republic (DR-CAFTA), and Mexico, among others. With this and a strong work force, progress is being made.

Meanwhile, Ortega is trying hard to stay in power and obtain the much needed economic support/aid by approaching nations that are not on the CIA's good boys lists for aid (Oil rich - Venezuela and Iran)... I just hope Ortega can turn things around for his people's sake... If not, we can look forward to the 2011 elections.

So why Nicaragua?... So you don't have to read my biased answers (since I'm an investor there), here are some biased/unbiased articles that aided me in considering Nicaragua:

First Contact
After years of searching for a beach home, we contacted the Secret Cove, first via telephone and then by e-mail. The phone conversation went well and Ray Jackson (salesman and one of the owners) answered our questions that we typically asked developers:

When will the condo project be ready?
What is the payment schedule (i.e. down payment and installments/balance payment)?
What commissions and fees will be incurred in addition to the price?
Are you planning to increase the price, and when?
Do you arrange and manage rentals?
Since the condo is on a slope - a technical question - has geo-technical testing been done, and what kind of foundation will the structure be built on?
How would the title, deed, etc. be documented?
Can we have a copies of the current building permit, the Escritura (Property Deed), the Historia Registral (Property History), and your title with First American?
Do you have a site plan with the locations of the condos that you can email to us?
etc...

Email correspondences went on for while asking about H.O.A. bylaws, fees and restrictions; attorney fees; access to property; road conditions; neighboring properties; furniture packages; purchase agreement(s); wiring instructions; condo standards; income projections; and etc... etc... etc... Ray was quite helpful in answering all our questions/concerns, sending us property photos, site drawings and contract information.

Below is a slide show of some renderings of the development:

After wiring a hold on the property (totally refundable), I arranged for my travel down to Nicaragua by the end of January. My wife and my children stayed back due to work and school, respectively. Ray and his wife Donna invited me to stay at their B&B in San Juan del Sur, while I checked out the area. I took them up on it. I booked my tickets and started to plan my trip, including checking out some other developers.

Flight Down
I flew down to Managua via Miami. What I did like about the flight was that it was only 2.5 hours from Miami, so it was less than 6 hours from Dallas with the layover in Miami. Next time I would like to try Continental via Houston which should shave off 2 hours. The following shows direct flights from US airports:

Houston George Bush International - Continental Airlines
Atlanta Hartsfield-Jackson - Delta Airlines
Miami International - American Airlines
Fort Lauderdale International - Spirit Airlines

Managua – MGA
Once we landed in Managua, I was quite surprised at how modern the airport was. The airport was very clean and new looking. Going through immigration, I paid the US$3.00 and got my passport stamped. Next, I picked up my luggage, walked by some airport police, smiled at the customs officers, and searched for the car rental counter. I reserved a vehicle from Alamo. Both men across the counter spoke English quite well. The only problem was that they did not have my reserved AWD SUV available, and it took almost an hour to get me an alternate vehicle (4x4 pickup).

Note: Later, I realized there was no need to have a 4x4, but if you like to explore off the beaten path and/or if it is the rainy season, I would recommend it. This trip, I had to use the 4x4 mode four times, but I was exploring on washed out dirt roads deep into the forest, crossing rivers and climbing steep terrain.

While waiting for my truck to be delivered, I noticed an ATM machine, so I decided to get some Cordobas while waiting. Unfortunately the machine only dispenses U.S. dollars, but just like any international airport, an exchange booth was available. Later, I learned that Nicaragua lives on dollars (even the federal employees get paid in dollars). Once the truck was delivered, I did a thorough inspection and made sure all the floor mats, the hazard triangle (required) and fire extinguisher (required) were present and accounted for. The truck they gave me was a four door 4x4 Nissan Frontier that was powered by a small diesel engine. What great mileage I got!

When exiting the airport, I could turn left and go through the heart of Managua, or turn right and go through Granada (another tourist destination to check out). I decided to go right. At the right, is a map of my route (in red) down to San Juan Del Sur where Ray and Donna run a Bed and Breakfast.

In less than an hour, I was in Granada, and it is a beautiful colonial city with lots of tourists around the square. As I drove through, I saw a lot of restaurants, shops and old world charm. This is a town that's worth a thorough visit in the near future.

Passing through Rivas, I was amazed at how much has changed for the better. When I was there in 2000, the city was quite depressing and not much going on. Today, the town has a new coat of paint and was busy with people. Wow! What atransformation!

Travel south from Rivas, I turned right onto the road to San Juan...

Note: When I was driving through Nicaragua in a pickup truck, many people smiled and waved at me, and I smiled and waved back. What nice people I thought... But then after the tenth waver, I realized they were not waving to say hello, they were waving for a ride. Since the buses are full and sometimes unreliable, this is how many people get around... and on this trip I must have given close to 50 people rides in the back of my pick-up truck.

Under three hours and one-hundred-twenty miles later, I had made it to the sea side village of San Juan, and parked my truck outside Ray's and Donna's B and B. I got out of the truck and noticed the street was quiet, quaint and clean. I rang the doorbell and waited for an answer. Donna came to the door and welcomed me to their home.

The Jacksons and San Juan Del Sur
This six-bedroom B+B will be my base for the next two days. After I got settled in at the B+B, Donna introduced me to Ray Jackson, a tall, fit, silver haired fellow with a good tan. Later, I was surprised to find out Ray was 70-years young, and a retired trial lawyer from California. I hope I'm that fit when I'm 70. His son, Sean, ~45-year old Californian, who I'd meet later, is the second owner of the Secret Cove development. Sean is in charge of the operations and the development of the Secret Cove. Sean was the first Jackson to settle in Nicaragua. He met his wife (a Nicaraguan) in Guatemala, fell in love, and ended up with her in her motherland. Sean worked for Re-Max as an agent in San Juan, and then took up the opportunity to be a builder and has never looked back. I asked Sean, "What do you want to do next after completing the Secret Cove?" He told me that he wants to start another development. Sean speaks Spanish fluently, works hard and expects the same from his a crew of 10-12 laborers. The third and final owner is Rudolf Walcher. I did not meet Rudolf on this trip. But I believe he does have a role in getting permits and such.

That evening the Jacksons took me out for drinks at the Pelican Eyes resort, which overlooks the town and bay, and then to dinner at El Colibri, a Mediterranean themed restaurant in a colorful garden setting. All was very good. Here are guides of places to eat at in San Juan:

htt p://wikitravel.org/en/San_Juan_del_Sur

http://www.sanjuandelsurguide.com/

The Secret Cove Visit
After forty-five minutes of driving on the Pacific Highway, we turned right onto the Secret Cove access road that they share with several other developments. At the cove, we met Sean and his crew working on the first house that sits right off the beach. I was happy to see that their craftsmanship was impressive and exceeded expectations, and the design was well suited to the topography and the environment. The views are staggering of the beach, the bay and the mountains across from it. Just remarkable.

Below are some scenic views of the Cove and adjacent areas.

Please note that the beach is larger than it appears in the photos. I was surprised when I first set eyes on it. The sand is a fine salt and pepper sand- consisting mostly of quartz. During high tide, the beach is a sliver of bleached white sand, and during low tide, a lot of rock outcrop is exposed on both ends of the beach, but still plenty of sand. The cove is protected quite well for anchored boats or for kids to play in the water. For larger waves, you can take a trek (less than 1-mile) to an unnamed beach that faces the open ocean.

Conclusion: After two days of checking out the Secret Cove development, visiting other developments, comparing workmanship, walking the beaches in the area, driving the Pacific highway to Costa Rica, and talking to Sean and Ray in great detail; I feel that the Secret Cove offers the following:

The deal makers:

best bang for the buck,
buying from developers who are former ReMax agents in Nicaragua that know the market and the pitfalls,
great ocean views from every room in the condo/townhouse,
best layout and buiding design for the tropics with ocean breezes,
short trip to and from the U.S.,
very close to Costa Rica with direct flights from DFW to Liberia (*See note below),
a small international beach community,
great earning potential, and
the most memorable vacation experiences.

The risks:

buying at a time when the US economy is tenuous,
buying in at the early stages of development,
buying from owners that are new to the scene in developing properties in Nicaragua; and
buying property in the early stages of Nicaragua's evolving real estate boom.

Here are some data that was used to help narrow our search:

The Second Visit:

Here are some photos that we took during our recent trip down to the Cove and other parts of Nicaragua:

I have been told that the drainage at the development has been excellent and Sean and Ray have avoided erosion by slowing down the drainage by opening the storage pond (a storm water basin). They will ultimately put in a water containment vault and pump when necessary to maintain this storage for the dry season and erosion control during the wet season.

2011 Secret Cove is Now Wireless
Here are the data plans for Claro wireless internet service that will be available for use at the Secret Cove. All the plans include the same internet speed or bandwidth of 1.5 Mbps the difference between the plans is the download capacity.

Turbonett Movil Light 1GB at $12.00 per month
Turbonett Movil Plus 3GB at $19.00 per month
Turbonett Movil Pro 5GB at $24.00 per month
Turbonett Movil Full 10GB at $34.00 per month

You don't need to be a resident to acquire a plan, just your passport, a utility bill and two months deposit from whatever plan you select.

2011/2012: Continue Road Improvements

Road and bridge construction between SC and San Juan del Sur is moving along. Here are some recent snaps:

Stay tuned for continuing updates, and if you have any questions, feel free to email me at pdjamesjr@gmail.com.

BTW: If you have Google Earth, feel free to download a .kmz file located at:
http://bbs.keyhole.com/ubb/ubbthreads.php?ubb=showflat&Number=1351278&#Post1351278.

It will take you on a 9 minute fly-over road trip to the Secret Cove from San Juan del Sur, passing by some of the best beaches in the Western Hemisphere. Enjoy.

Finally, Below is a slideshow of the ongoing construction at the Secret Cove. Enjoy:

The Secret Cove - Playa Manzanillo - Bahía Salinas - Nicaragua

Discovering Paradise at The Secret Cove (The Search)